The use of company cars in the UK has experienced its first uptick since 2015, propelled by a significant rise in electric vehicles (EVs) provided to employees, according to the latest data from national accountancy group UHY Hacker Young.
Figures released by the group indicate that the number of company cars in the UK surged to 760,000 in the last fiscal year, up from 720,000 the previous year. Of particular note, the adoption of EVs as company cars saw a remarkable 76% increase, reaching 220,000 vehicles compared to 125,000 in the preceding year.
The prevalence of electric vehicles among company cars also saw a notable rise, accounting for 29% of all company cars in the 2022/23 period, a stark contrast to just 1% recorded in 2018/2019.
Ian McMahon, Partner at UHY Hacker Young, said: “There are major government incentives on the use of electric vehicles as company cars. Employees only have to pay a tax charge on 3% of the value of an electric company car per year, compared to up to 37% for conventional cars.”
He added, “The substantial increase in electric company cars last year demonstrates that electric vehicles can continue to gain market share if they receive adequate subsidies.”
Looking ahead, McMahon cautioned that the tax charge for electric vehicles will incrementally rise by 1% of the vehicle’s value each year until at least 2028. This raises questions about whether the growth of electric vehicles as company cars might slow in the coming years.
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By GlobalData
The trend towards electric company cars underscores a broader shift towards sustainable transport solutions in the corporate sector, driven by environmental considerations and financial incentives.
